ALCOHOL COUNTERMEASURE SYSTEMS (HK) LTD AND ANOTHER v. LI CHI KONG PETER

HCA 2336/2014 and HCA 193/2016

[2019] HKCFI 2892

HCA 2336/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2336 OF 2014

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HCA 193/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 193 OF 2016

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DECISION

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Introduction

1.  By a summons filed on 4 June 2019 (“the Summons”), Mr Li, the Defendant (“D”), applied for an order striking out various parts of the witness statements filed by the Plaintiffs (“Ps”) on purported grounds of inadmissibility, and for an order forcing Ps to call the makers of various documents at the trial of this action.  Ps opposed the Summons. 

2.  I heard the Summons substantively today.  My decision is to (1) dismiss the Summons; (2) order D to pay the costs of the Summons, including all costs previously reserved, summarily assessed by me at HKD 200,000.00 to Ps, forthwith; and (3) order D’s own costs to be taxed in accordance with the Legal Aid Regulations (collectively, “the Decision”).

3.  My reasons for the Decision are as follows. 

Background Facts

4.  Ps’ case is that D was an employee of the 1^st Plaintiff (“P1”), and a director of the 2^nd Plaintiff (“P2”). 

5.  According to Ps, D made fraudulent misrepresentations to Ps, via Ps’ Mr Bruce Bailey (“Bailey”), in consequence of which Ps suffered loss and damage. 

6.  D denied he did anything wrong, and counterclaimed alleged unpaid wages, etc. 

D’s Submissions

7.  Mr Allen Lam, Counsel for D, submits, inter alia, that those parts of Ps’ witness statements which contain hearsay evidence ought to be struck out as inadmissible, carrying no weight or out of considerations for fairness, and those documents of Ps which he mentioned in his skeleton all contain hearsay evidence the makers of which must attend the trial and be cross-examined out of similar considerations.  He submits there should be an order in terms of the Summons. 

Ps’ Submissions

8.  Ms Karis Yip, Solicitor for Ps, submits, inter alia, that the Summons is frivolous, vexatious and an abuse of process so it should be dismissed with costs forthwith. 

My View

9.  The Summons should be dismissed. 

10.  Section 47 of the Evidence Ordinance (Cap 8) (“the EO”), in its current form, reads as follows: -

“(1) In civil proceedings evidence shall not be excluded on the ground that it is hearsay unless—

(a) a party against whom the evidence is to be adduced objects to the admission of the evidence; and

(b) the court is satisfied, having regard to the circumstances of the case, that the exclusion of the evidence is not prejudicial to the interests of justice.

(2) The court may determine whether or not to exclude evidence on the ground that it is hearsay—

(a) in the case of civil proceedings before a jury, at the beginning of the proceedings and in the absence of the jury;

(b)   in the case of any other civil proceedings, at the conclusion of the proceedings.”

11.  I said “in its current form” because prior to its amendment in 1999, this provision was stricter.  This provision was amended, and the law on admitting hearsay evidence in civil proceedings was relaxed in the most generous way, as a result of a 130-pages long report published by the Law Reform Commission of Hong Kong in 1996.  After this 1999 reform, hearsay evidence has become generally admissible in all civil proceedings unless the court is satisfied its exclusion “is not prejudicial to the interests of justice”.  As far as civil proceedings are concerned, the burden is now on the party seeking exclusion of hearsay evidence to justify his position. 

12.  Given the above, pre-1999 authorities on the subject, such as Allington Investments Corp & Ors v First Pacific Bancshares Holdings Ltd & Ors [1995] 2 HKC 567, should all be read subject to the 1999 reform. 

13.  In Amrol v Rivera [2008] 4 HKLRD 110, DDJ Justin Ko, as the Acting Chief District Judge then was, had the opportunity to consider the post-1999 Section 47 and said those statutory considerations set out in Section 49 of the EO (concerning the issue of weight) could also be looked at as a useful guidance in Section 47 considerations. 

14.  Section 49 of the EO reads as follows: -

“(1) In estimating the weight, if any, to be given to hearsay evidence in civil proceedings the court shall have regard to any circumstances from which any inference can reasonably be drawn as to the reliability or otherwise of the evidence.

(2) For the purposes of subsection (1), regard may be had, in particular, to the following—

(a) whether it would have been reasonable and practicable for the party by whom the evidence was adduced to have produced the maker of the original statement as a witness;

(b) whether the original statement was made contemporaneously with the occurrence or existence of the matters stated;

(c) whether the evidence involves multiple hearsay;

(d) whether any person involved had any motive to conceal or misrepresent matters;

(e) whether the original statement was an edited account, or was made in collaboration with another or for a particular purpose;

(f) whether the circumstances in which the evidence is adduced as hearsay are such as to suggest an attempt to prevent proper evaluation of its weight;

 (g) whether or not the evidence adduced by the party is consistent with any evidence previously adduced by the party.”

15.  As one goes through Section 49 of the EO (above), it seems obvious that arguments on the admissibility or weight of hearsay evidence should in most cases be left to the trial judge and be argued at the end of the trial.  One wonders, for example, how can one conclude a person has a motive to conceal or misrepresent matters, prior to the commencement of the trial?  Similarly, how can one conclude a statement must be “made in collaboration with another”, prior to the commencement of the trial?  In Amrol itself, all arguments on the admissibility of hearsay evidence were heard at the end of the trial.  That was, of course, explicitly provided for in Section 47(2)(b) of the EO (above). 

16.  Whilst the jurisdiction to rule on the admissibility of hearsay evidence prior to the commencement of the trial does exist – see paragraphs 18 to 20 of Cheung Wei Man Vivien & Anor v Centaline Property Agency Ltd [2004] 1 HKC 692 per Lam J as Lam V-P then was – the circumstances under which such jurisdiction should be exercised in favour of exclusion must in practical terms be quite limited. 

17.  With the above in mind, I examined each part of the witness statements being objected to by D.  I am far from satisfied excluding such parts would not be prejudicial to the interests of justice.  In fact, I believe the interests of justice positively require such parts to be kept, at least until the conclusion of the trial. 

18.  By way of example, D wishes to exclude the sentence “I have found that Steve made no such assurance” at the end of paragraph 11 of a witness statement dated 1 August 2018 signed by Bailey.  To explain why the proposed exclusion would be against the interests of justice (at least at this stage), I need to set out the original text of the said paragraph 11, which is as follows: -

“Peter has claimed that the Employment Contract does not contain all the terms of his employment and that Steve Chau orally assured him that ACS China would sign another employment contract with him which would be supplemental to the Employment Contract such that the Defendant would be employed by both ACS HK and ACS China. Peter has also alleged that he was entitled to allowances and has produced a Chinese Labour Contract to support his claims – see Appendix 6 for a copy of the Chinese Labour Contract and its English translation. I have checked Steve Chau’s emails and the documents of the company which were exchanged with Peter on this point. I have found that Steve made no such assurance…”

(Emphasis added)

19.  The above being the original text, how could I, or anyone, just allow the witness to say he checked something, but disallow him to tell us what he found?  Striking out the sentence “I have found that Steve made no such assurance” in that original text would render the evidence of this witness incomplete and incomprehensible, to the detriment of the interests, and indeed the administration, of justice. 

20.  Similar, if not identical, problems exist vis-à-vis all other parts of the witness statements being objected to by D. Striking out individual sentences in the manner proposed by D would simply render the evidence of the witnesses in question incomplete and incomprehensible.  If D takes issue with the truth, or reliability, of the evidence of these witnesses, he is at liberty to cross-examine them.  With the greatest respect, each case must be decided on its own facts, and D’s current attempt to truncate the intended evidence of Ps’ witnesses in the manner as proposed by D by way of an interlocutory application (via the Summons) is, in the circumstances of this particular case, counterproductive. 

21.  On the documents the admissibility of which D is challenging via the Summons, I would not force Ps to call their makers either. 

22.  By way of example, D objects to Ps producing a print-screen from the website of “The Tax Bureau of Dongguan”.  In the absence of any challenge on authenticity, I cannot see the utility of this Court forcing Ps to go and find out who the “webmaster” of that website was, or who clicked on the print icon to get the screen images printed out, and then ask him to come to this Court to give evidence.  What, one may ask, could be the probative value of his live evidence?  What sort of cross-examination questions could be legitimately asked of such a witness?  If D takes issue with the truth, or reliability, of the contents of any webpage on the ground that the maker cannot be found or cross-examined, he can make submission to that effect during closing submissions.  It would be quite wrong for me to effectively “bury” this document prior to the commencement of the trial, when it may well become relevant and probative as the live evidence of the trial unfolds.  In my view, the trial judge is in fact quite entitled to look at all the documents currently being objected to by D via the Summons and then decide, at the end of the trial, what to make of them.  Their relevance and probative value cannot be properly assessed before the commencement of the trial. 

23.  The above being my view, I must dismiss the Summons.  I express no view as to whether some of the problems alleged by D to exist should or should not be resolved by the administration of interrogatories under Order 26 of the RHC. 

Costs

24.  Costs of the Summons should follow the event and be paid by D to Ps forthwith.  

25.  On the quantum of costs, Ps claim a total of HKD 235,493.00.  Pursuant to paragraphs 13 & 14 of Practice Direction 14.3, I examined each item in Ps’ Statement of Costs, and also the final figure.  Item Nos. D3 & D4 seem to be slightly excessive.  Taking a broad-brush approach in the assessment of costs, I consider a total figure of HKD 200,000.00 to be fair and reasonable. 

Final Remarks

26.  I do thank both advocates for their most able assistance.  For the avoidance of doubt, I certify the attendance of Mr Lam for the purpose of Legal Aid Taxation.